New York City Just Banned Credit Checks for Job Seekers

Employers can often discriminate against people who need money most.

New York City Council has only recently banned businesses from using credit checks to screen job seekers. This is a hell of a good idea, long overdue. Councilman Brad Lander sponsored the measure, and Mayor Bill de Blasio signed it into law in May. It prevents employers from considering your credit score, of all the clunky metrics, when deciding whether to hire you. This daft practice is still legal in most places. It shouldn’t be.

On top of standard employment procedures like background checks and criminal histories, credit checks are used to judge potential worker efficiency despite the fact that studies have shown there to be no legitimate correlation between productivity and credit history, and that they generally provided no farther value to employers.

The practice, currently used by 47 percent of employers nationwide, was thought to unfairly effect disadvantaged people who were either unemployed, without health care, or in serious debt who would have been unable to obtain jobs because of their situations. The catch-22 is appalling. People who aren’t working and need money to pay off debts thus can’t get jobs — because they need money to pay off debts. This is a cruel, cynical quagmire to impose on someone who’s just looking for a dang job.

Why prevent people from gaining the ability to make money if their main problem is that they owe money? “Credit checks for employment unfairly lock New Yorkers out of jobs,” a spokesman in Lander’s office told me Monday. “There is no link that can be shown between credit history and job performance, and now New York City law reflects that fact.”

Linked or not, only ten states — including California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Vermont, and Washington — have laws to prevent employers from screening job applicants’ credit. Some cities have specific laws that cater to particular occupations, such as workers in a supervisor role or employees in finance jobs that regularly handle money.

Massachusetts Senator Elizabeth Warren has introduced legislation called the “Equal Employment for All Act which seeks to end the practice of employment credit checks across the country.

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The law is a huge step toward ending systematic employment discrimination that used an opaque number as a factor in determining your ability to find work. Now every New Yorker has a fairer shot at turning their financial woes around, and hopefully everyone else in the country will soon enough.